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December 02, 2008

Bill Sizemore’s Tangled Web of Lies

I don’t recall ever feeling as vindicated as I do at this moment. At long last, someone is shouting out that Bill Sizemore has no clothes! Judge Janice Wilson’s 46-page ruling, which is scathing, to say the least, is now posted on the Web (no pun intended). It is, in fact, so scathing it actually includes a 4-page addendum listing “Examples of Deceit by Mr. Sizemore.” But because so few people will actually read the decision, and because I believe it is important to create a record online that will facilitate the public memory and future researchers, I will quote extensively from some of the more poignant passages here.

Yes, this is a long post, though one I believe is very interesting and particularly well written (perhaps I am biased?), but I have seen that my previous posts on Sizemore continue to be read by those researching his behavior and that of his cohorts; hence, I will do my best to lay out the important information so it will not be lost. Hardcore Sizemorephiles will want to read the full decision, particularly to get a better picture of the timing and amounts of money Sizemore took out for his own personal use (totaling approximately three-quarters of a million dollars over a two-year period), about which I have written before.

First, the prior three contempt of court citations are explained, and pertain to his efforts to avoid paying the unions the money he owed to them:

Mr. Sizemore, OTU-EF and various “successor organizations” have been found in contempt of court for violating the injunction three times. Judge LaBarre found a contempt for OTU-EF’s transfer of assets and Mr. Sizemore’s failure to properly sign CT-12s and Form 990s. That proceeding is sometimes referred to by the parties as “Contempt #1”. This court found Mr. Sizemore and OTU2-PAC, and OTU successor organization, in contempt for the transfer of assets by OTU2-PAC (Contempt #2). In Contempt #3, this court found Mr. Sizemore and Give Seniors a Break (another OTU successor organization) in contempt of court, likewise for transferring assets.

Sizemore did all he could to deceive the Court and his political opponents, and a full reading of the decision makes it plain that his lies flowed forth constantly (though I will not lay them out in this post):

In order to obfuscate the source of the money and his activities, Mr. Sizemore used various sham corporations including Initiative Resource Management (“IRM”), ATRF, CBS Consulting, Initiative Preservation Institute (“IPI”) and Oregon Taxpayers United (“OTU3”). He also used Democracy Direct in his ploys. Mr. Sizemore shifted the money path to make it more difficult for the plaintiffs to collect their judgments against him and to prevent the plaintiffs from learning that he was violating the injunction.

He used the garnishment of his wages by the unions as an excuse to avoid paying bills (which, as a small business owner, I find utterly repulsive):

On January 14, 2008, Mr. Sizemore emailed Ms. Subramaniam, who was doing all of the work on ATRF’s website... In that email Mr. Sizemore was giving advice to Ms. Subramaniam on how to get rid of people who were trying to get money from her. He wrote: “Tell them the unions are now garnishing my wages and I can no longer pay you. It is true that they are garnishing my wages, though they are not getting anything for their troubles.”

Here’s a little bit of information about Ms. Subramaniam. She was in financial straits and contacted Sizemore because one of his ballot measures would help her. Typical of Sizemore, he took full advantage of the talents and trust of this sincere woman in pursuit of his own gain (emphasis mine):

By the time Ms. Subramaniam started, ATRF had paid Mr. Sizemore (or for his benefit or the benefit of his family) more than $165,000 for work that had no value. In contrast, while Ms. Subramaniam worked in excess of 2,000 hours for ATRF and her normal billing rate is $75 per hour, she received less than $15,000 from ATRF through the end of 2007.

Of course, he didn’t limit himself to taking advantage of poor women. Sizemore also, as most people are well aware, went after what was contained in the deep pockets of as many wealthy men as he could. One of those men is Dick Wendt. After many, many years of financially supporting Sizemore, Wendt, and particularly his attorney John Courtney, ultimately went to great lengths to hide that support, but in the end they were unable to do so. What is truly hilarious is that Sizemore actually misled Wendt and his people in order to milk them for all he could (this is hilarious to me because I have tried so long and hard to warn wiseacres like these guys about Sizemore, and have been ignored) (emphasis mine):

Mr. Courtney said that Mr. Wendt was interested in hiring Mr. Sizemore as an employee of HCPA [Hire Calling Public Affairs] and had encouraged him to move to Klamath Falls. Mr. Courtney was opposed to an employment relationship because some of the things Mr. Sizemore was doing were not consistent with the mission of HCPA. Mr. Wendt still wanted to find a way to provide financial support for Mr. Sizemore. Mr. Courtney discussed the matter with Mr. Sizemore, who recommended that HCPA pay him through ATRF. Mr. Sizemore told Mr. Courtney that ATRF was a nonprofit incorporated in Nevada and founded by Michaela Alexander. Mr. Sizemore led Mr. Courtney to believe that ATRF was active in many states. Mr. Sizemore never told Mr. Courtney that he was in complete control of ATRF.

Mr. Courtney was concerned that Mr. Sizemore not be an employee of HCPA and not be seen as involved with that organization. His concerns were shared by Jon Hobbs, another HCPA employee with whom he exchanged emails about the “Bill Issue” or the “Sizemore issue.” They agreed that there should be a “wall” between Mr. Sizemore and the American Institute for Full Employment (HCPA’s nonprofit arm). Even more, it is apparent that they were concerned about creating deniability for HCPA, which would in fact be paying Mr. Sizemore $8,850 per month, specifically calculated as the equivalent of the value of an annual salary of $80,000 per year plus, benefits (with an additional gross up for taxes) and office rent.

Now look at the official story that Mr. Courtney made sure everyone understood in order to protect himself, Mr. Wendt, and JELD-WEN from the “Sizemore issue”:

Mr. Courtney wrote to Mr. Hobbs in an email dated August 10, 2006, and copied to two other HCPA employees:

“We should all be versed in the following, in case asked.

- Bill Sizemore is not employed by AIFE, HCPA or JELD-WEN
- Bill is an independent contractor with a nonprofit tax research organization outside of Oregon (Nevada)
- The Nevada company leases space from HCPA in HCPA’s building, separate from AIFE, HCPA, etc. (the space is in Transitionswear, sep. entrance and sep. space)
- Dick is not on the board of the Nevada company (and as a nonprofit, by definition, he is not an owner)
- There is more than one funder of the Nevada company and we do not know who they all are
- Bill lives in Klamath Falls
- Bill’s work address is a P.O. box, his mail is diff from our and his phone is diff from ours”

Mr. Courtney ultimately told a fib of his own to the Court, and in fact Judge Wilson characterized him as “exquisitely evasive”:

Mr. Courtney first testified in the contempt hearing that the money HCPA paid to ATRF was a donation or contribution for which nothing was expected in return. That testimony was directly contradicted by an email exchange Mr. Courtney had with another HCPA employee.

To clarify Judge Wilson’s view of Mr. Courtney, I quote the following exquisite passage:

I cannot do justice to his [Mr. Courtney’s] ability not to answer questions without quoting his testimony in such detail that it would unduly lengthen this already-long opinion. It was the kind of obfuscation that lamentably gives lawyers such a bad reputation among many people.

Judge Wilson’s decision looks at the failure of Sizemore to fulfill the purpose of ATRF and lays out her conclusion as to what Sizemore, Wendt, and Loren Parks each got out of the “sham” foundation, ATRF (emphasis mine):

Why, then, was ATRF paying Mr. Sizemore such large sums of money? The inescapable conclusion is that ATRF was a sham charitable organization set up to pass money provided by Loren Parks and Dick Wendt to compensate Mr. Sizemore for his work on initiative measures. The arrangement potentially provided:

- a tax exemption for the donors, especially Mr. Parks and his organizations;
- a mechanism for Loren Parks and the Parks Foundation to violate the injunction against them in State of Oregon v. Parks Foundation, et al., Marion County Circuit Court No. 00017224 without easy detection;
- a cover for Dick Wendt’s support for Mr. Sizemore’s initiative work without employing him in his own organization and providing deniability of the very close relationship between HCPA and Mr. Sizemore;
- a means for Mr. Sizemore to evade his creditors, especially the plaintiffs in this case; and
- a mechanism for Mr. Sizemore and ATRF as a successor organization to OTU-EF to violate the injunction in this case by transferring assets without easy detection.

Even Grover Norquist was involved in the web of deceit (keep in mind that Norquist’s history indicates very strongly that he does not send money to other organizations unless it was given to him specifically for that purpose, and then he first skims a share off the top before laundering it through to the intended recipient):

On August 31, 2005, Americans for Tax Reform Foundation sent a check for $33,750 to CBS Consulting. Mr. Sizemore testified that he could not recall what the money was for.

Tim Trickey, a seemingly decent and enthusiastic young idealist whom I have repeatedly tried to warn to be careful of Sizemore, has also been caught up in Sizemore’s web of lies (emphasis mine):

Mr. Trickey gave more than one version of the source of the $100,000 paid to Mr. Sizemore through IRM in late 2005. He testified at one point that the entire amount was “profit” from the 2006 election cycle. At another point he acknowledged that the $30,000 came from Loren Parks, to be used to get initiatives for the 2008 cycle ready to go. At a third time, Mr. Trickey said that Mr. Parks had sent Democracy Diect a check for $30,000, but testified that the money was simply part of the funding for signature gathering for the 2006 election cycle, some of which was “left over”. In this version, Mr. Trickey decided on his own to use the money to have Mr. Sizemore start on the next cycle, but it was not intended as a pass-through from Mr. Parks to Mr. Sizemore.

Mr. Trickey’s testimony on the source of the $100,000 is contradicted by other evidence.

Footnotes from the above passage are enlightening:

In April 2007, Mr. Sizemore was deposed in a separate action he brought challenging the injunction on constitutional grounds. When asked whether he had “ever done any work for Democracy Direct for which you’ve been paid,” his answer was “No, not that I recall.” In this contempt hearing, Mr. Sizemore testified that when he read the transcript of the April 2007 deposition to prepare for his deposition in July 2008, he concluded the quoted answer was not accurate or complete and so notified his attorney. He never explained why he said it in the first place. Mr. Sizemore further testified in the April 2007 deposition that he was working two or three hours per month for Democracy Direct as an unpaid volunteer.

In more than one instance it appeared that Mr. Trickey was attempting to conform his testimony to what Mr. Sizemore had said in prior testimony. For example, in his deposition taken in June 2008, Mr. Trickey testified that Democracy Direct had never made any payments to Mr. Sizemore. That was consistent with Mr. Sizemore’s testimony in 2007, but not his testimony in this contempt hearing.

PLEASE NOTE: Mr. Trickey has responded to and clarified this matter in the comments below. I urge you to read those comments and for the record want to state that I believe him. It is my opinion that those who have prosecuted this case for so long have become so jaded by Sizemore's incessant lies that they have a hard time believing anyone, including, unfortunately, Mr. Trickey.

There’s another interesting character involved here, one Michaela Alexander who has gone by a wide variety of names in connection with Sizemore’s various organizations (Cynthia M. Miller, Michaela Rohrer, M. Miller, and C. Webb). She additionally seems to have something in common with a former employee of Sizemore’s, Kelly Highley, whose convenient car accident and subsequent amnesia (or aphasia) destroyed her ability to testify at the original racketeering trial.

Michaela Alexander was a friend of Mr. Sizemore from their college days in the 1970’s. She said she reconnected with him in recent years and now considers him her best friend. She testified that in the last several months she has had some medical problems and is taking powerful medications. She said that those circumstances, together with the turmoil in her life at the time of relevant events, cause her to have some memory impairment.

As events unfolded, Michaela seems to have realized at a point that there was a problem with Sizemore because she resigned as president of ATRF. Apparently, Sizemore pressured her to stay on in some capacity, and she wrote the following statement to him, which has not been explained:

“I was originally removed as of November, but you needed me one more time. So, I would like very much to consider my time as completed.”

Sizemore’s response was telling, and sounds remarkably similar to several talks that he and I had over my concerns about the activities of OTU between 1998 and 2001:

“ATRF is not doing anything illegal, so you have nothing to worry about. The unions are after me, not ATRF. They have not even been served in the lawsuit. A donor has put up the money to cover what the unions are demanding from me, but we do not intend to give it to them unless we have to and I don’t think we will.

I do not see you as having any vulnerability to worry about. If there was a vulnerability, it would only be financial and the foundation would cover that and has the money to do so. So don’t worry about any of this.”

Of course, any money to which Sizemore has access becomes, in his mind, his money, so the odds that he would allow any of that to be used to pay any liabilities that fell on his “best friend,” Ms. Alexander, are exceedingly slim in my opinion.

Here’s one example of how Sizemore finessed more money out of the various organizations than he was supposed to:

[Sizemore’s employment] agreement did not call for ATRF to pay rent for the Sizemores in Klamath Falls, but Mr. Sizemore apparently deemed this to be a cost of relocation. ATRF paid over $43,000 in house rent for the Sizemores between September 7, 2006 and February 5, 2008.

I’m sure many an employee seeking reimbursement of relocation expenses for a job would love to have a year’s worth of rent included in the deal, particularly if they were able to use that reimbursement to rent a house costing approximately $2700 a month. Sadly, the everyday people Sizemore claims to represent cannot typically afford such rent themselves, nor can they convince their employers to pay it for them.

There is so much more, and it is very clear to me that the longer Sizemore has been allowed to continue his scheming the more greedy and blatant he has become, but in any case, I find Judge Wilson’s summary, well, delightful in an admittedly perverse way (in a later passage, she calls the loan restructuring “phony”):

In summary, the Sizemores borrowed money from ATRF for things having nothing to do with the mission of ATRF and for things which were not permitted under the agreement between ATRF and Mr. Sizemore. The amount of the loan exceeded what the agreement allowed. Mr. Sizemore then “repaid” ATRF’s $235,000 loan by conveying to it a lot that was purchased for $200,000, of which $12,000 was ATRF’s own money.

Judge Wilson offered numerous statements which reflected her exasperation with Sizemore. Here are my favorites (emphasis mine):

ATRF’s corporate records, its filings with the Nevada Secretary of State and its filings with the Internal Revenue Service are either non-existent or so incomplete and riddled with errors as to lead this court to the conclusion that Mr. Sizemore was intentionally lying and attempting to mislead anyone who might be trying to understand whether or not he was complying with the injunction. (His actions might well have also misled anyone trying to collect a judgment against him, but that is not the subject of the proceedings currently before this court.) Mr. Sizemore’s repeated lying under oath in prior testimony and his efforts to prevent plaintiffs from obtaining ATRF’s records confirms this conclusion and made this court’s fact-finding process much more difficult than it should have been. A non-exclusive list of examples of the breadth and magnitude of Mr. Sizemore’s mendacity is set forth in Appendix A to this opinion.

Especially note her choice of language in the following passages (emphasis mine):

- From the very beginning of ATRF’s existence, Mr. Sizemore used it to pass money to himself and his family from Mr. Parks and used ATRF’s bank accounts as his personal piggy bank.

- The curious history of ATRF’s Form 990 for 2006 is also very telling as to Mr. Sizemore’s motives and intent to evade detection of his violations of the injunction.

- Mr. Romig [ATRF’s accountant] discussed with Mr. Sizemore whether ATRF would need to file a CT-12 in Oregon for 2006. As shown by Mr. Sizemore’s comments in his requested “corrections,” he did not want to do so. He lied to Mr. Romig about ATRF’s actual activities in Oregon in order to obtain the advice that no CT-12 was required. If Mr. Sizemore had been truthful with Mr. Romig about ATRF’s activities, Mr. Romig would have told him that a CT-12 was required for 2006.

- … Mr. Sizemore has demonstrated a near total disregard for the oath …

- I find that the amount of work done by Mr. Sizemore in furtherance of the legitimate work of ATRF was negligible and did not justify a fraction of the money Mr. Sizemore caused ATRF to pay him or pay to benefit his family. The website was a fig leaf.

Regarding communications between Sizemore and his accountant in preparation for ATRF’s tax return, Judge Wilson notes (emphasis mine):

Many of those statements by Mr. Sizemore were false, and he knew it. He asked that the changes be made because he knew plaintiffs would obtain the Form 990 and he did not want them to know the truth, including that he had violated the injunction.

Of course, Sizemore insists that his ATRF foundation was a legitimate nonprofit. Judge Wilson has this to say about that (again, emphasis mine):

What did ATRF do during the first two years of its existence? Did it carry out its purported mission to “research and publish the fiscal impact of real and proposed ballot measures”? The only evidence of what ATRF accomplished is reflected in the printouts of the content of ATRF’s website as of November 6, 2007 and January 3, 2008. The earlier printout is the most probative because it reflects what ATRF was doing before the flurry of activity after plaintiffs started investigating it. Furthermore, most of the content added by January 3, 2008, concerns initiative processes in various states (not tax systems or the fiscal impact of ballot measures) and it is undisguised cut and paste - most of it from the Initiative and Referendum Institute at the University of Southern California School of Law. [Perhaps that organization ought to go after Sizemore for plagiarism?]

Twenty-two months after ATRF was formed, and after it had spent over $1,000,000, its website contained almost no analysis of the fiscal impact of any real or proposed ballot measure. The website contained quite a bit of information about Oregon’s tax structure and its history, but provides a summary analysis of only one ballot measure by name or number – Measure 41, which was on the ballot in November 2006. That analysis, if it is not drawn completely from materials created in connection with the measure campaign, could have taken no more than a few hours to prepare.

This sounds suspiciously similar to my observations about the work product of OTU-EF back in 1998-2001.

I particularly loved this part:

Mr Byrne’s analogy in closing argument was apt:

“As I explained to Mr. Sizemore earlier today, well, you’re like the guy pulled over for the DUII. If you blow into the breathalyzer, you’re taking your chances; if you don’t you lose your license. You just lost your license.”

Of course, one is only taking one’s chances in taking a breath test if one is actually driving under the influence.

All of this is very interesting. But there is also a sort of soap opera unfolding here that is worth noting: Bill’s loyal wife has been caught up in the madness and her seemingly honest testimony has not been helpful to his efforts to stay out of trouble, so far as I can tell. Frankly, I think he has put her in a very, very tough situation, and one I don’t believe she deserves.

If there is anything about this entire mess that hurts me to this day, it is the impact all of this has had on Bill’s wife and children. It has always troubled me greatly that Bill has not seemed to prioritize what was best for his family, even going so far as to list his own mother, Grace Sizemore (a.k.a. Grace Foster, Gene Foster, or Imogene Foster), as a participant in some of his ventures, thereby placing her in legal jeopardy. With that in mind, the following portion of Judge Wilson’s ruling is a horror show in my opinion that reminds me of other incidents in which Bill lied to his wife and put her in a bad spot, as he also did me (though that, while unchivalrous, is far less egregious than betraying the trust of his wife, children, and mother):

“CBS Consulting” is apparently a for-profit company. It is owned by Mr. Sizemore’s wife, Cindy Sizemore. Cindy Sizemore testified that she does not run CBS Consulting, however. Bill Sizemore does. Cindy Sizemore has very little knowledge of CBS Consulting’s business. For example, she knows little about ATRF, although ATRF paid CBS Consulting more than $174,000 between February 2006 and February 2008 and paid her personally more than $30,000. She testified she was unaware that CBS Consulting had done business with Hire Calling Public Affairs (“HCPA”), although CBS Consulting invoiced HCPA $9,050 per month for July, August and September 2008.

CBS Consulting has filed no tax returns. Cindy Sizemore testified that her husband said that it was unnecessary for CBS Consulting to file its own tax returns because all of the information about CBS Consulting was reflected in their personal tax returns. (Mr. Sizemore testified that neither he nor his wife have filed personal tax returns for 2006 or 2007, however.) Cindy Sizemore testified that money held by CBS Consulting was the same as money in the family’s personal checking account.

That was not the only organization Bill claimed erroneously that his wife owned.

Mr. Sizemore testified that his wife owned IRM [Initiative Resource Management], although he also testified that IRM had never issued any stock and Cindy Sizemore testified that she did not own IRM.

I’m not sure which Sizemore will find worse – being in jail for a few days or seeing his wife again after putting her through a personal hell she did not deserve.

As for the “Examples of Deceit by Mr. Sizemore,” I will leave that to those who are willing to click through to read the decision. The insightful addendum begins on page 43.

Posted by Becky at December 2, 2008 02:02 PM